Operation Saylor Episode - 1/120
Hi there, welcome to Operation Saylor series.
I have decided to take a loan to invest in Bitcoin. I will make a series of monthly updates here to track the evolution of this operation I have dubbed Saylor (in honor of Michael Saylor, whose bold bet on Bitcoin and willingness to promote it where strong inspirations for this adventure).
My goal with sharing this experience is to allow everyone to learn whatever can be learnt from my plan and execution. I draw inspiration from Jamespunk's great blog on his bitcoin DCA path, which was and is a great example of how a real life, first person narration can be very instructive. I hope this series can fulfill a similar role for this different investment approach.
As this is the first episode, I'll provide some context so that you understand better this and future updates.
The Operation
On July 2022, I took a loan with my usual bank. This is an uncollateralized personal loan with a fixed amortization schedule. The main figures:
- Principal: 33,000€
- 120 installments in 120 months (10 years)
- APR: 5.99%, APY: 6.16%
- Each installment will be of 366.20€
- Total interest paid will be 10,944.33€
- Early amortization penalty of 1%
- No opening costs
As this loan has no collateral, there is no margin call or liquidation of any sort. The loan is completely orthogonal to whatever the evolution of bitcoin's price is.
During the first six months, my plan is to swap 5.000€/month into bitcoin. I do this instead of simply lump-suming everyting today to softly minimize the risk of picking a terrible entrypoint.
After these six months, I will have a bitcoin stack of a certain amount and around 1.000€. From that point on, the plan is to:
- Pay the installments each month.
- Whenever the € stash goes very low, sell a bit of bitcoin back for € to pay for the next installment. Goal here is to keep as much value in bitcoin as possible and only go back to € tactically to cover the installments.
- Repeat until 10 years have passed and the loan is paid backed.
As time passes, two scenarios can take place:
- In the SHTF (shit hits the fan) scenario, the bitcoin stack of Operation Saylor goes dry before the 10 years have passed and I am left with 0 btc and some outstanding debt with the bank. I will be forced to keep paying the installments from my personal pocket and Operation Saylor will have turned into a net negative for me. This could happen both in case a black swan completely destroys bitcoin and its value, or simply because bitcoin's market value doesn't go up fast enough to make a net return.
- In the Moon scenario, I manage to pay all the installments by taking small bites of my bitcoin stack and I still have some amount of btc left in the end. If this is the case, I will have successfully earned value with my bet, and I am left with a nice stack of some unknown value. This would happen in a scenario where bitcoin behaves the way it typically has for the past 10 years (or with a slightly watered-down behaviour in terms of both return and volatility, but still trending upwards) and I get lucky with the volatility in the early months and years.
My hope is that Moon scenario will happen, but I am very well aware that SHTF scenario is a serious possibility.
Are you crazy stupid? Never borrow money for investing
I am aware that there is a not negligible probability of losing several thousands of euros with this operation. But, after carefully judging, I think there is also a significant chance of getting a great upside. After playing with different simulations and hypothesis, I decided that the expected outcome looked net positive and decided to pull the trigger.
I am also taking a calculated risk. Given my personal finances and life circunstances, the SHTF scenario would be a nasty blow but not a death sentence. Even if I get hacked on day 1 and lose all the money, I still expect to have a plate on the table every day and a roof over my head.
Why make it a series
There are several motivations to doing this.
- Explaning and documenting my plans helps me reflect on them deeply. It's a bit like a peer review, with the only difference I am reviewing my own plans.
- As discussed before, I find personal, real life stories of bitcoiners and their actions fascinating. Macro
environment analysis, papers, technical and economics books,... They are all great reads. But I think sometimes we also need simple stories from regular people like us, with all the crisp of the real life and down to earth practical issues and details. Bitcoin is, after all, a grassroots, bottom-up phenomenon. It is the small actions of you, me and everyone else which compose the emergent behaviour of the network. - I think that, on most forums and communities, there is a dogmatic rejection to any kind of idea related to borrowing money for investing. I am the first one to agree that, for most people, most of the time, it is a terrible idea that should be avoided. But it is also my belief that under the right circumstances, it is a valid strategy. And so I am slightly pissed off because this automatic, parrot-like "NeVEr BorRoW tO INvEsT" comments hijack any kind of honest, open-minded debate around this option. I hope that these series can counterbalance this and get people discussing in a calm and thoughtful manner the possibility of doing something similar to what I am doing. If the angry mobs hijack my posts anyway, at least I hope that whoever is curious about the outcomes of taking this seemingly crazy and bonkers course of action can ignore the deniers and simply read my story.
Why not simply DCA with a part of your salary isntead
I am. This operation happens on top of my already regular DCA schedule. So you could say I am doubling down.
As time passes, comparing Operation Saylor to having DCA-d the amount equal to the paid installments will be an interesting analysis.
So should I do this as well
The answer that most probably fits your circumstances is no.
But, depending on your personal finances, risk aversion, other investments and what kind of loans and conditions you have access to, there is a chance that borrowing to invest might be a suitable option for you.
I invite you to run your own analysis and put a lot of thinking into this decision. During the series, I will share my own train of thought and the numbers I ran before pulling the trigger.
If you reached this far, thanks for reading. I'll be happy to discuss further in the comment section. You can find below the numbers that I will be posting regularly. I will also post some thoughts/ideas/whatever relevant comes to mind on each episode. But for this month I will close here. I already stole enough of your time and attention.
Stats
- BTC stack: 0.2083 BTC
- € stack: 28,000 €
- Current total value in €: 32,761 €
- € into BTC: 5,000 €
- Paid back to bank: 0 €
- Outstanding debt: 43944.33€
- Installments to go: 120
I don't think so. A stacker like that would have a low trust score, so their zapping wouldn't move the needle much on posts. Also, zap size is counted logarithmically, so it becomes very expensive to elevate content as a single zapper.
A handful of downzappers could take down such a whale.
Gonna be huge for a lot of apps, esp for us at Mutiny. Getting access to push notifications should allow for a good "offline lightning receives" experience without having to go through the app stores. Plus prompting people to install via their new third party home screen install controls should raise a lot more awareness for PWAs as well.
Probably the chicken feeder guy.
Yeah, your interest shows through in the show.
Thanks very much. That was fast. Only 11,237 more and you're done.
Resident of Switzerland here.
One thing that needs to be pointed out is that CHF is probably the strongest fiat currency in the world and that Swiss gov. has a pretty low debt to gdp ratio. Otherwise such low interest rates would not be possible.
Nice idea. Just got to be careful with certain types of bamboo.
Don’t grow it near your house because it can pop-up anywhere, up through the floor or where you least want it.
From what I gather it needs plenty of pruning. It’s strength is being able to grow super quickly, being strong & re-sporning from underground, but that can also be its weakness - if not prepared to actively stay on top of it
Not the week, but today, learned the basics of Nostr, linked my account here, and it seems to be awesome really.
c equals the speed of light
It's just way too early to even ask those questions. I think there's a high likelihood it'll be around in a year and that's about all I can predict. It solves a problem for me today so that's all I care about.
I thought you were killed if you were fired from a job. Literally thrown in a fire. Thank god that’s not true lol
Went bouldering after a long while again. I sucked hard as expected haha but I will probably (hopefully) regain my strength pretty fast.
Also, my coinjoins using Whirlpool in Sparrow wallet are almost done! Only 2 UTXOs remaining from 12. Took only almost 2 weeks lol.
After that, I can finally start to open some channels and dip my toes into running a LN routing node.
Will also sign a contract for a new position related to bitcoin today. One step closer to finding my spot in the bitcoin space!
I personally don't think LN is done, and in fact, I think it's a great success already, though perhaps it isn't (and won't be) the kind of success that people were originally hoping for. And that's the interesting point, which the quote above illustrates: it's hard to know what the world will want and use.
If btc doesn't die out entirely (and I don't think it will) then I have strong conviction that the ways in which it's actually used in a decade will surprise the hell out of people now. That's not a shortcoming in lightning or in anything else. It's the complexity of the world.
This is the right approach. Just keep saving, live without wasting money, and dip into those savings when its really necessary. Life will be good.
I have a story for you. I have no idea if it will help you, but it was important for me in the journey of my "relationship with money".
When I was in my early 30s, because of a project I was working on, I got to meet, hang out, and generally spend time with a billionaire. Not just a 1 or 2 Billionaire, but at the time he was worth about $18B - probably much more now (I won't name him for obvious reasons).
There is lots I could say about him, lots of ways I got to see the world thru him, lots about the family struggles and general legal issues that happen with the mega wealthy....but my most important 'epiphany' came from just pondering how ordinary his life was.
I mean he and I had the same cell phone, we ate the same foods, wore similar clothes, etc. Now none of this was some intellectual surprise to me....I mean I knew that just because a person is wealthy that they don't have some sort of extraordinary existence. But it was more of an emotional epiphany.
I used to leave my meetings with him and ponder all of that. What did it really mean to be rich? I mean like right now at this very moment.....one person has a cell phone, another has a cell phone. One drinks a coke, the other drinks a coke. One sits on a couch in an air-conditioned room, the other the same.
In the moment we call the "present", wealth really doesn't matter at all. Its just numbers on a screen.
Most of the reasons we are driven to acquire wealth are for some future concept. We keep imagining that "one day when I'm worth X, then I will..." but the weird thing is that day never comes. Because we are always just in the "present". The future, as such, never arrives.
I worked for 20 years building a small business (general IT consulting)....as I got better and better clients and made more money, it always struck me how unsatisfying the money actually was. Beyond a nice meal, decent place to sleep, and basic necessities for my family....money is sort of meaningless.
Acquiring possessions is a fools errand. You don't "own" that Ferrari. The Ferrari owns you! When you go to start it in 3 months and the check engine light comes on and the tire is flat, it is you who will be spending the day making phone calls and arranging your time to satisfy the car. You bought a fantasy...but really all that arrived is another thing to break and waste your time on.
I remind myself of this on days when BTC soars or drops, that in the end if you ate decently and slept in a comfortable room, your actual moment by moment existence of life was pretty much indistinguishable from a mega-wealthy person.
The biggest flaw in the Fedimint narrative is that there will be all these community fedi mints. The underlying assumption is that users prefer a distributed, potentially anonymous federation over single centralized is just wishful thinking and has no bearning in reality.
Running a bitcoin core or an LNbits node for a few friends is one thing, but Fedis are taking actual custody over people's money. This is a completely different ball game. No one would just entrust their money to a bunch of Anons on the Internet who you might not get hold of if something goes wrong.
If I am forced to give up custody of my coins and entrust them to a third party, then I am much more likely to go with one professional player that knows what they are doing, instead of a "group of friends" who might have the best intentions but not the resources or skills to guarantee availability, security, disaster recovery, customer suport etc. etc.
Like, if you want a profesionally operated federation, why not use Liquid?
All that means that at the end of the day only professional, known player (most likely incorporated companies) can offer viable Fedimints. And there goes your decentralization. They'll be very easy targets for regulators as they'll have a phone number and the people behin them; they are probably required to get money services businesses or even banking license and of course fall under KYC/AML rules.
Congratulations, we have built banks 2.0.
So, I doubt we will see any of the benefits that the Fedimint hype trainer folks promise us.
I am truly confused how that sort of custody is suddenly OK, while Hosted Lightning Channels on the other side receives all the "oh but it's custodial" FUD.
Of course, HCs have trade offs and they are well documented, but they offer very decent amount of privacy, are proven and available today, and are natively on the Lightning network and not some extra software stack on top
Generally, Yes - there are more shares that have been issued.
If you had 10 shares of a company that had 100 total shares, you would have 10% equity. If the company offered new shares (e.g 20 more shares to have a total of 120 shares in the market), you would have 8% (10/120)
I think this deserve the bountie
https://lnshort.it/feeds/
Maybe add a date filter for searching. I use the search box a lot. That would be nice.
However the site is excellent as it is already!
Note for small miners:
The payout minimum is 0.01048576 BTC, which might be a lot if you have a tiny miner.
The good news though, is that lightning payouts are planned for next year, which should allow you to get the payout eventually.
https://m.stacker.news/27623
I think I've only used it three times.
One was targeted at you, before I found out you couldn't see it.
One was while a few of us in the saloon were trying to figure out what downzapping does look like.
The only real one was some stupid post calling everyone racist. That's the exact kind of toxic internet content that I don't want SN to devolve into.
Really interesting... I watched a tv show about this years ago where the host profiled some blind people who were really good at the maze navigation using little handheld clickers to make a sound. Then the host learned to do it himself in a surprisingly short amount of time, though not nearly as good as them. It always stuck with me.
I suspect there are real cognitive benefits to developing unused parts of your brain like this. I've heard yoga teachers and similar use the term "the body is the mind", and I think they're on to something there.
There are a bunch of studies about how balance training could rapidly grow certain parts of the brain and it has impacts on memory and cognition.
https://pmc.ncbi.nlm.nih.gov/articles/PMC5515881/
Also reminds me of the Guugu Yimidhirr people or Tzeltal Maya people who have an impossibly precise internal compass developed through their language. The human brain is capable of what seems like superhuman shit!
https://en.wikipedia.org/wiki/Guugu_Yimithirr_people
So am i
I listened to Whitney Webb on TFTC last night. She really got me motivated on setting up my own server. I don't want to create a big post. Just wondering what you guys are doing. I'm lazy, so I was thinking Start9. I know there are cheaper DYI alternatives too, which I would consider so long as the software isn't a huge hassle.
I love cryptographic password less auth, hate the idea that it's attached to a lightning node / wallet. For one it instills a bad habit of keeping the same node pubkey forever. For two it's tying the same level of access to log in to some random website as your financial wallet - separations of concerns people... For three, for passwordless auth it's still rather lacking. No key rotations or multikey support.
I'd love to see a dedicated non lightning app for this otherwise I hate being forced to use it (yes some websites require it)
But nevertheless great write up!
I can get too focused on the future instead of the here and now
https://zupimages.net/up/23/05/oraa.png
malleability soft-fork was segwit.
Great question. If "fate" here means ultimately fading away vs. Bitcoin, I hope they eventually do! I just see them as an important interim stepping stone to that future state whether it's via supporting stablecoins on Lightning or other use cases that can serve as additional ways by which people stumble their way onto the Bitcoin network (vs. getting bogged down elsewhere).
I'm repasting below something I shared in another post to give you a flavor of what those interim stepping stones look like for us at Joltz in a loyalty & rewards context:
Today, jumping straight to bitcoin is too big of a leap for the vast majority of businesses - I can give the best sales pitch in the world of why they should integrate bitcoin rewards (new customer acquisition, etc.), but they'll inevitably ask "well what about my existing customer base?" -- the answer of course is that maybe 10-20% of them would opt-in. At that point the business says well why bother.
So they need a way to increase that %. One way to do this is with branded (fungible) loyalty tokens that look and feel much more like a normal loyalty point to consumers (plus no business wants to willingly sacrifice the branding attached to their loyalty program). You can still back those assets with BTC, but it's packaged in a more accessible-looking vessel. Another thing you could do is back it with stablecoins instead of BTC - I know that sounds cringe to us, but now you've really removed every objection a business might have. If many businesses do this, it also gives consumers the ability to much more easily exchange these different forms of value vs. what they have today. And of course they can always convert into sats, and at least you've gotten people onto the network from which they can easily do that.
I think a more important question is, do we privatise also the forests and rivers? The air that we breathe? How do we, as a whole, care for the global environment if doing so is against the economic interests? (Because it costs money to do so and thus means higher prices in aggregate and most consumers will choose cheaper products.)
Only once, as a client, where I met your mother
Code is protected by the 1st amendment like any other form of expression. But in this case, the code is irrelevant. It's undoubtedly about KYC/AML.
This case will have consequences on other privacy projects. Consider this scenario:
Yes, the above is a stretch, and that's the problem. It would only be a stretch to apply similar charges to people working on other privacy-related cryptocurrency projects.
Moreover, simply arresting developers does severe damage. For instance, the police would keep whatever computers they steal in the process of arresting developers.
I am not radicalized. I am a sane human driven by logic and reason that refuses to go along with clown world.
Interconnected Energy Grids by @mallardshead. Seeing the human energy and research go into that post alone was all the motivation I needed to get writing more. Only just realised it today when answering this question. Hope you get typing again mall...
I might be late for the daily discussion. I'm excited for tomorrow because I've started working with another Bitcoin project to orange pill people from South Africa. I firmly believe Bitcoin adoption will explode in Africa in the next five years. One of the leading retailers in South Africa also started accepting Bitcoin payments. I am bullish.
That's a sad chart because the teens is the moment to seal true friendships for life, and learn important social and negotiation skills.
I personally have a couple of friends that I see on a regular basis. Our friendship revolves around our common interest for sports. We meet at least once a week, either for training or other social events.
I also have a few more people that I've known for much longer but are living abroad. We see each other very rarely, but I would still consider them as close friends.
Coincidently, an old friend from school that i had not seen for several decades, found my number in a random WhatsApp group and surprised called me this morning.
Lockdowns have taught me the value of true friendship.
Great Jones Street, by Don Delillo. I'm a big DeLillo fan. This isn't his most popular book. I read it years ago and enjoyed it. Many, many years ago I used to hang out in a bar on Great Jones Street. Maybe that's why I enjoyed it so much the first time I read it.
My thoughts: would you like to use your own Matrix server for collaboration and not Discord as Discord is centralized?
Something like postman for nostr events. With a a UI to fill in the fields.
As well as subscribe to things and see what the responses look like.
I have had a similar experience of surprise and delight at the senior center. My friend took me with her to their weekly music sharing circle, which had a cute name but I forgot it... Everyone went around and performed a song. There were guitars, violins, clarinets. It was informal, sweet, respectful. I played a Phoebe Bridgers song.
Writing code
Pirating? People think it's like scamming.